Geopolitics drives scandium’s breakout moment

• China’s export curbs plus Western government funding have pushed scandium out of niche status
• Sunrise Energy Metals secured landmark EXIM funding, the first for an Australian scandium project
• Here’s why that’s important, plus a few other ASX stocks exploring for the critical mineral

The convergence of Chinese export restrictions and Western government financing has thrust scandium – long considered a boutique alloying element – into the critical minerals mainstream.

In a breakthrough for local scandium development, Sunrise Energy Metals (ASX:SRL) landed a $67m funding LOI from the US Export-Import Bank in September, the first time an Australian scandium project has attracted institution-level backing.

The financing for Syerston – the world’s largest and highest-grade scandium deposit with 19,000t – represents around 50% of the estimated development cost and comes with attractive repayment terms up to 15 years.

The funding underscores a shift in sentiment, signalling to investors that major financiers are finally paying attention to scandium, as supply-chain risks escalate.

Industry participants such as Australian Mines (ASX:AUZ) CEO Andrew Nesbitt have termed the development a “wake-up call”, telling Stockhead that now suddenly, countries and manufacturers are looking very closely at where their critical materials come from.

At the same time, he added the technologies that use scandium, from aerospace alloys to new energy systems and even high-performance semiconductor components, are all demanding additional reliable supply.

Currently, that supply is anything but secure.

The US hasn’t mined scandium since 1969 with most economies (Canada, France, Germany, Italy, the UK, Australia and the US) still dependant on China for everything from rare earth magnets to battery grade critical minerals.

When it comes to scandium itself, around 85% of the refined chemical market and almost all metallised scandium used in semiconductor production is sourced from China.

That imbalance has heightened the focus on what happens when the tap tightens, like it did in April when the Middle Kingdom placed export restrictions on a range of medium and heavy rare earth elements including scandium.

Countries and companies with the potential to become alternative supplies suddenly became hot topic.

This included countries like the US, whose Department of Defense backed Mountain Pass operator MP Materials in July with the promise of US$110/kg floor price for NdPr oxide and billions in investments to bankroll a magnet production line operated by the company.

Three months later, Australia and the US locked in a deal to commit at least US$1bn each in a bid to wrestle control of rare earths pricing and supply from China in an aim to build a resources supply chain from one country to the other.

READ MORE: China’s export restrictions highlight Western miners ready to produce heavy rare earths

Scandium’s turning point

Nesbitt reckons the metal is now at a turning point.

“Supply chains are shifting, governments are playing attention and end users are finally ready to scale – but only with reliable supply,” he explained.

For scandium to break into mainstream use, Nesbitt believes the industry needs a reliable first mover capable of consistent, long-term production outside China

While Australia still has a long way to go before getting to that point, there are several ASX scandium plays doing the hard yards now – working their projects up, getting ready for production and setting their asset up long-term supply certainty.

Australian Mines eyes scandium growth at Flemington

Australian Mines is advancing its Flemington scandium asset in central NSW with a planned 1000m drilling campaign that kicked off this month to test a large, underexplored geophysical anomaly which hasn’t been tested.

Its proximity to Sunrise’s Syerston deposit positions the company as a direct beneficiary of increased interest in the region.

Both projects are within the same geological intrusive body, with Flemington host to one of the world’s highest grade scandium resources at 6.3Mt grading 446ppm scandium at a 300ppm cut-off.

And that’s within a broader 28Mt zone grading 217ppm scandium at a 100ppm cut-off.

When you line up the geophysics, the geology and limited sampling the company has undertaken, Nesbitt said even a modest hit could add meaningful tonnes – or lift the grade – for the next resource update.

Flemington’s mineralisation also sits in a very favourable setting.

“Shallow and close to infrastructure, with metallurgy that looks straightforward compared with many global peers – it’s rare to find that combination of grade, geometry and location,” Nesbitt added.

“We’re focused on doing the hard technical work now: drilling, metallurgy, and commercial engagement. If we get that right, Flemington is very well placed to be one of the world’s go-to sources of scandium.

“We’re designing Flemington to be flexible, so we can grow with the market rather than be exposed to its swings.”

ASX juniors gearing up

In addition to establishing a large 838.7Mt gallium resource at its flagship in Esperance in WA, Mount Ridley Mines (ASX:MRD) is also exploring scandium opportunities within Blocks 1 and 2, otherwise known as the Grass Patch Complex.

The Grass Patch Complex is a distinctive geological domain within the region, defined by a pronounced gravity and magnetic high, interpreted to reflect mafic intrusions which are interpreted to be the primary source of gallium and heavy rare earth enrichment in the regolith.

The explorer is currently assessing the broader critical mineral potential by reviewing multi-element datasets and existing drilling coverage.

At both blocks, exploration work includes ongoing resource-definition studies to assist in defining new targets and resource estimates.

Mount Ridley believes the Grass Patch Complex remains underexplored for gallium, scandium and heavy rare earth elements, with most historical work focused on base metals.

Other explorers like Hawk Resources (ASX:HWK) is homing in on scandium potential at its Olympus project in WA’s West Musgrave region after securing $5m through a placement to investors.

A binding head of agreement with unlisted company Opal Resources gives Hawk an option to earn up to 80% of the project in an area that has potential to be a new scandium province.

A review of pXRF analyses of historical soil, lag and RAB samples identified a 4km x 7km scandium soil anomaly with grades up to 1,284ppm Sc and peak RAB assays of 2,164ppm Sc over 1m sample intervals.

This project aligns with Hawk’s plan to drive near-term value from copper and gold, including its Cactus project in Utah, while adding scalable critical minerals upside

And it’s still early days for Heavy Rare Earths (ASX:HRE) but data from an airborne magnetic radiometric survey at the Radium Hill project is set to guide the company on the finalisation of a target generation work stream by the December quarter.

The project holds uranium, scandium and rare earths exposure from which 2.6Mlbs at 1,200ppm O308 triuranium octoxide was mined between 1954 and 1961.

Although scandium and REE were known to be associated with uranium at Radium Hill since the early 20th century, there was no attempt to recover these metals until the final year of operation, and systematic sampling has never been carried out.

At Stockhead, we tell it like it is. While Australian Mines, Mount Ridley Mines and Heavy Rare Earth Elements are Stockhead advertisers, they did not sponsor this article.